Cisco's Approach to Innovation

Transcript

Introduction

Marthin de Beer: Lots of start-ups get funded because people think they have great innovative ideas, and lots of products get built based on venture funding, but only one out of ten of those companies where someone thought, "this is a really good idea," actually become successful businesses.
Peter Shaplen: Marthin de Beer is Senior Vice President for Cisco's Emerging Technologies Group. I'm Peter Shaplen, and I welcome you to this podcast series.

Interview

Peter Shaplen: Marthin, continue on that theme.
Marthin de Beer: Most people think of innovation in the form of a new product. So clearly, there are technology innovations. But there are two other important kinds of innovations: One could be a process innovation, and a third one is a business model innovation.
Peter Shaplen: Innovation is pretty high on my list of words that are overused. How do you define innovation?
Marthin de Beer: So let's talk about innovation perhaps from a product point of view. We innovate throughout the organization, throughout our development organization, in all groups. We spend $5.5 billion a year on research and development. We build some of the world's most complex ASICs (application specific integrated circuits) and hardware systems, and we also develop some of the world's most complex software that run on servers and on our hardware platforms.
But the more challenging part, and often the more impactful part, is new product innovations that truly can change the way they (businesses) operate, either by significantly improving employee productivity or significantly reducing operational costs and truly transform their business.
TelePresence, I think, is a very good example of that, where that dream of face-to-face meetings across long distance have always been there. But with TelePresence the experience was good enough that you could build trust relationships, you could do business over long distance, and the customers now use that technology very extensively.
Peter Shaplen: So what's Act II?
Marthin de Beer: Well, Peter, I think TelePresence in itself will have multiple acts. Today, we're in the business space. At Cisco, we have almost 500 TelePresence rooms deployed. As one example, we do more than 5,000 meetings a week. More than two million participants per quarter participate in TelePresence meetings.
Act II is really how do now we enable companies to do business in a new way with their customers and their partners and their suppliers? Act III will be as we move into the consumer space, and Act IV will be a new set of business and consumer services.
But beyond that, there's this much bigger area of video. The reason text and audio have been so important in the past was because they were easily accessible. Once video is truly searchable, and it gets used as a natural form of interaction by employees and by consumers, video will become the lingua franca and will be used ubiquitously in everything we do.
Peter Shaplen: I'm curious where the innovation part stems from. How do you look at an idea and determine if it's truly innovative?
Marthin de Beer: We've created an open model for innovation, and what we've done is we facilitate the interaction and collaboration of a lot of very smart people, some working for Cisco and some not, that is coming up with these ideas through that connected process.
Peter Shaplen: But is that different from other companies? I've had lots of companies say, "Oh, we're innovative. We're creative. We've got good people."
Marthin de Beer: Well, I think it is. First of all, we've used Web 2.0 technologies like wikis for people to bring ideas to the table. Anyone can add an idea. Anyone can comment on that, can change the idea. And that's how the wisdom of the crowd over time then forms these great ideas.
We've done the same with our I-Prize contest to solicit great ideas from innovators, from entrepreneurs from all over the world.
Marthin de Beer: So now you end up with thousands of interesting billion-dollar business ideas, some interesting and some, frankly, not so interesting, but, you know, you need both.
And then we have created a very repeatable process by which we can then take an idea, translate it into a real innovative product, and then translate that product into a profitable, billion-dollar-plus business for Cisco. And that's the "secret sauce" that we call the internal venture framework.
Peter Shaplen: What's the difference, then, between innovation, tossed trippingly off the tongue, and operational excellence?
Marthin de Beer: Well, that's very interesting and, frankly, a hotly debated issue. Great companies have to be excellent at both, because if you are very innovative -- creating a lot of great innovative products -- but you don't have a good process to make those successful, profitable businesses, those innovations go nowhere.
Conversely, if all you're about is squeezing out the next dollar and optimizing more and cutting costs and you don't create the next wave of innovative products, then, you know, two, three, five years down the road, you are going to fall behind and then, you're in a world of hurt because coming up with the innovative products take multiple years.
Peter Shaplen: So as senior vice president of emerging technologies group, and you go off and you sit with John Chambers and he says, "What's new?" I would think that has all kinds of different meanings when it comes to the two of you in a room together. How do you answer?
Marthin de Beer: What really gets John's attention is when you not just articulate a very interesting vision, but also when you can translate that into an executable strategy.
And then lastly, he always wants to know and understand how there is an architectural play in this idea that will create sustainable differentiation for Cisco over time.
Peter Shaplen: Is there a business executive who's a model for you?
Marthin de Beer: Well, let me take John as an example. He's a great visionary, and he often can see market transitions well ahead of anyone else.
I think of Steve Jobs from Apple as a tremendous innovator who has been very, very hands-on in ensuring that no product leaves Apple to their customers if he doesn't believe it is solving a real problem and it's going to be very, very relevant from a user interface point of view, is absolutely excellent. He drills that into his teams literally every day.
I've had a CO I worked for back in South Africa. If I walked into his office and said, "this particular item is broken. We need to fix it," he'll pick up the phone and call five people into his office right
away to address that problem. He is the antithesis of a procrastinator, and I tried to make that my own, because there's no better time to solve a problem that right now.
Peter Shaplen: How would you articulate, then, the culture of innovation that you have as part of the emerging technologies group?
Marthin de Beer: First of all, it's okay to fail. If everything I do succeeds, then I didn't take enough risk. So risk is in my DNA and is in Cisco's DNA. Secondly, people have to feel they are working on something that is going to make a real difference.
Thirdly, I would say challenge the norm. It is totally okay to bring a wild idea that may offend me. I like those, actually, the best, and that is part of the culture that we have inside of Cisco is, it's okay to challenge the norm. People might disagree with you, but it's very important that people are heard because the wild ideas of today could become the billion-dollar businesses of tomorrow.
Peter Shaplen: If someone were looking at the reading on your desk or your bedside table, who inspires you?
Marthin de Beer: Leonardo da Vinci. I think his understanding of the future was because he was so multi-faceted in his talents and skill sets. Leonardo is, to me, a great example of not just a futurist but someone that truly was a visionary.
Peter Shaplen: What could Leonardo learn from the culture of innovation that you have inspired here, and what would Cisco learn from Leonardo?
Marthin de Beer: Gosh, that's an interesting question. I hesitate to answer because it would be a very humbling experience to think that he could learn anything from us. But I would say the business model and process innovations that we've added to the technology innovations are what makes the idea become a billion-dollar successful business.
He has obviously been very visionary in thinking about technology advancements in the future, but we have actually put that in practice and have been able to get lots and lots of people to adopt that.
On the flip side, what we can learn from him is that it's fun and it's okay and it's very good to be a dreamer. Even if you are branded as a fool today, you may be the hero of tomorrow because you were willing to dream, and I think we should never stop dreaming, and always believe in the search for the possible.
Peter Shaplen: Marthin de Beer, Senior Vice President for Cisco's Emerging Technologies Group, it's been a pleasure speaking with you.
Marthin de Beer: Same here, Peter. Thank you.
Peter Shaplen: An archive of this and other podcasts with Marthin de Beer, as well as a great deal more about innovation at Cisco can be found at News@Cisco.com. For Cisco in San Jose, California, I'm Peter Shaplen.